Buying A House On A Busy Street

Houses | April 22, 2019

If this is your very first day reading Toronto Realty Blog, let me give you one the best pieces of advice I can possibly provide: real estate in Toronto is all about trade-offs.

In fact, if I were to define the search process for every buyer in the city, in every price point, in every location, and for every property type, I would say that the search is merely an exercise in identifying, examining, evaluating, and accepting trade-offs.

Save for those with an unlimited budget, isn’t that what every real estate search is about?

I remember writing a blog a few years back about trade-offs, and using the example of the entry-level freehold buyer.  Back then, it was probably those looking on the east or west sides of central Toronto under $800,000.  Today, that’s probably under $1,000,000.

I argued that the search all boiled down to trade-offers, and notably which features of a home you would sacrifice.

That’s another good word for the search, in the context of trade-offs: sacrifice.

Which features of a home would you sacrifice, in order to be able to buy?

Detached vs. semi-detached, parking or no parking, 3-bed or 2-bed, 2-bath or 1-bath, finished basement or unfinished basement, backyard or no backyard, renovated or unrenovated.

Choose wisely.

For those looking today under $1,000,000, you’re almost guaranteed to be looking at semi-detached rather than detached, provided it’s a 2-storey.  That’s the first trade-off, and the first sacrifice.

I tell my clients to try not to fall in love with a 2-bedroom house that has the other features they want (ie. nice backyard, renovated, front pad parking), because they’re going to be calling me in 3-4 years saying they’re pregnant with their second kid, and they need to move into a house with more space.

I advise my clients to consider whether they’d rather park their car on the street every night, or pay an extra $75,000 for a house with a legal front parking pad, thereby giving up that finished basement and second bathroom.

I ask my clients whether they would use a basement immediately, or if they could buy a home with an unfinished basement today, live with it for 3-4 years, then spend $50,000 to finish it, add a 4th bedroom, rec-room, and second bathroom.  Maybe this can get them into a better neighbourhood?

Trade-offs and sacrifices.  It’s the name of the game at every price point.

So take that list I provided above, and talk about location.  The big ticket is neighbourhood, and by association, school district.  Then on the micro level, we’re looking at things like corner lots, adjacent houses and/or what’s across the street, and then finally we get to the street itself.  Is the street sought-after?  Does it have “brand value” associated with the name of the street itself?  And how busy is the street?

That’s the topic I wanted to explore today.  It’s one I’ve explored before, but in the last seven or eight days, I’ve had this topic come up four times, and I almost feel like the real estate Gods are telling me something.

Last week’s Pick5 was on this topic, and it might present some supplemental value for those of you who are really keen on this subject.

But then after I filmed that Pick5, I headed out on the weekend and looked at one particular house on a busy street that really hammered home the need to pen this article.

There’s a house in the west-end which I will describe rather vaguely, since I have interested clients, which is absolutely picture perfect if not for the fact that it’s situated on a busy street.

In fact, when I first sent the listing to my clients, one of them wrote me back and said, “Great house, but the street is way too busy.”

And I agreed.  The street is way too busy.

But what if you had everything else you wanted in a house, and it just happened to be on a street that’s a thoroughfare for traffic, has a TTC route, and a bike lane?

I told my clients that we had to see it, and in the end, they loved it.  Hey, this ain’t my first rodeo, after all.

We sat in the house for an hour, and I gave them hypotheticals.

“This exact house, one street over where it’s quiet, for another $250,000,” I told them, to which they merely shrugged and smiled, as if to say, “You know we aren’t pre-approved for that number.”

“One street over, one less bedroom,” I told them, and they thought about it, but told me the 4th bedroom was an “absolute must.”

“One street over, no private driveway – it’s a laneway behind the house, and no garage, just gravel.  Plus an unfinished basement.”  That was a quick double-head-shake from the two of them, and we moved on.

We played the game until one of them said, “I get it, alright.  This is the one.”

I wasn’t trying to talk them into it, but merely suggested they consider it, and they did.  And in the end, they were willing to accept the busy street in order to get everything else on their wish-list, and have the house still fall into their price range.

This street also happens to be right on the border of a more sought-after school district, so being on the other side of the street itself, would have put them in another catchment.

All that’s left to do now is win this house on offer night.  Everybody’s fave. 🙂

Last fall, one of my best friends and his family purchased a home, and it too was on a busy street.

His search was a casual one over the years, but really ramped up when the family was about to grow, as is often the case.  The price was set, the location/neighbourhood was set, and all that was left was to find the “what” in the equation, ie. what you could get in that area for that price.  This is what I always refer to as “the real estate equation;” if you have two of price, property, and location, you can figure out the third.

The issue in our search was that the “what” wasn’t good enough.  I played devil’s advocate, and asked if the location could change, but that was a non-starter.  I didn’t want to push the price point, but I had to ask – and that too was a non-starter.  So what was left to do then?

You guessed it: buy a house on a busy street.

The house that they got is not on a major city street, but on a street that is busier than most in the area.  And what difference did that make in the price?  A $2.3 Million home on this spot, no word of a lie, would have cost $2.7M – $2.8M if it were across the road, and fifteen houses down the block on what is a very popular street.

A half-mill.

For 250 meters?

Now to be fair, I do think we got a deal on the price of the house when we bought, and maybe that eats into the value here!  But truthfully, I think that’s the difference in price that we were looking at.  And it wasn’t a price my friends were able to pay.

In the end, they got the dream house – maybe even more, when I think about it, as there were a couple of rooms/features we weren’t targeting, and they got it in a price point that worked, and, having been in the house many times, there’s zero street noise.  I mean, zero.

So what’s the fuss then about the busy street?  If there’s no noise, I mean?

Well, the way I see it, there are five issues with living on a busy street, some, all, or none of which can represent deal-breakers for perspective buyers:

1) Noise

This goes without saying.  Those who dream of the “quiet, peaceful, leafy, tree-lined street” probably don’t want the TTC stopping in front of their home every 10-20 minutes for the rest of their lives, nor do they want incessant honking at the intersection during rush-hour, or the not-so-gentle breeze of 10,000 cars driving by per day.

2) Traffic & Parking

As I discussed in my Pick5 last week, the idea of trying to back my car out of a mutual driveway on O’Connor Drive every morning during rush-hour, when 60 cars are lined up to make a left-hand turn onto Don Mills and head for the DVP is just a complete deal-breaker for me.

3) Kids’ Enjoyment

Do you envision your children playing on the front lawn?  On the sidewalk?  Maybe street hockey?  Well, they probably won’t be able to put the hockey net in the street on St. Clair Avenue East for very long before having to yell “car!”

4) Privacy

This might be a combination of all of the above, but I think a lot of folks take issue with living on a street that gets 100x the amount of foot-traffic, eye-balls and turning heads each and every day as a street right around the corner.  Being on a major city street means you’re somewhat “exposed.”

5) Safety

This has never really made sense to me, but it’s something that comes up a lot in discussion.  I suppose this overlaps with point #3, in that you might not want your kids playing out front on Eglinton Avenue, but a lot of people tell me it’s more to do with the potential for break-ins, or accidents in front of the house, both of which I think are far-fetched, for what it’s worth.

A little more than one week ago, I sold a house to long-time clients on a busy street.

The traffic isn’t an issue, in fact, the TTC out front is an asset, as well as the pizza place sixty feet away.

The parking for this home is accessed via the laneway out back, so a narrow mutual drive or impossible-to-back-into parking pad isn’t a problem.

The front porch is covered, with a separate door to the inside of the home, so there’s no noise, and you can’t even see the street unless you open two sets of drapes.

The kids won’t be playing out front, since they have an epic backyard out back that we never would have been able to afford if we purchased a house around the corner on a quieter street.

All in all, the house came in under $1M, which is a number they couldn’t have got to without being on the busy street.  And if this were around the corner, it would have been over $1,100,000 with ease.

So let me end this blog post with a question, the answers to which will be very helpful to one blog reader.

I have an appointment this week to meet with prospective clients who happen to own a beautiful house on a busy street.  It’s of the Bathurst Street, St. Clair Avenue, Avenue Road, Lawrence Avenue variety.

Let’s say this house is worth $1.4M – $1.6M.

What would it be worth if it were two blocks over, on a quieter street?

Dollar value, or percentage, please.

This is real-world application of real estate theory, since these particular home-owners might be making a move, and want to know how the busy street affects the value of the home.

Now what if this location also got you into a better school district?  There’s a little more food for thought as well…

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  1. A Grant

    at 7:56 am

    Whether or not I would consider living on a busy street would depend on what TYPE of busy street it was.

    Is it a busy Main Street? That is a street that sees all sorts of traffic throughout the day due to the availability of local amenities? If so, it’s something I would consider, despite the inevitable lack of on street parking and privacy.

    Or is it a busy thoroughfare? A four to six lane road that is choked with traffic during rush hours, but a racetrack outside those hours? No thank you.

  2. Ed

    at 9:15 am

    If you are on a ‘busy’ main street then be prepared to hear the constant hum of traffic when you are enjoying your outdoor space.
    Also you’ll be wiping the soot of your patio furniture once a week.

  3. Kyle

    at 9:37 am

    “What would it be worth if it were two blocks over, on a quieter street?”

    Really depends on the specific situation. In some cases the house on the busy street could command a significant premium, depending on zoning it could have more potential uses, such as land assembly by a Developer or commercial uses.

    In the actual City core, some of the houses on Roncesvalles, Queen East in the Beach and Bathurst would be worth as much or more than the ones on the side streets, but as you go further away from the core the houses on busy streets are worth much less than neighbouring side streets, like on York Mills, Sheppard, Finch.

  4. Rem

    at 10:18 am

    Paired sales analysis – Always the percentage difference to justify a dollar value. I’d start with comparing two properties one on a busy street v.s a less busy street, similar in size, finish and basement condition. Turn the difference in price into a percentage. I’d do this for both school districts and make sure all my comps are similar. You can then use the same method, two houses that are similar but in opposite school districts and isolate for the change in value. No properties are exactly alike but you can find similar ones using your judgement. You’ll run through MPAC square foot credits so I’d suggest signing up for fnf you can get a bulk discount on the mpac credits it’s $2 off the regular price. You can make up the info on sign up.

    1. Appraiser

      at 12:12 pm

      Oh yes, paired sales analysis. The holy grail of real estate appraisal theories.

      As one who has been appraising for 15 years and passed all of those damned AIC courses, let me declare that paired sales analysis is a wonderfully logical theory, but in practice it can be quite difficult and enormously time-consuming. There are often too many distinct variables to juggle / analyze in most real-life cases. Perhaps even more difficult and elusive than accurately determining land values for residential resales for your demo report.

      P.S. It should be mandatory for all MLS listings to have the MPAC or floor plan square footage in the listing.

      1. David Fleming

        at 12:20 pm

        @ Appraiser

        Re: MPAC or square footage being mandatory, I suggested this when I was on the TREB Condo Committee back in 2010, and it was shot down quickly by guess-who. “Legal ramifications” was the answer I was given.

        I’m sure TREB could strike a deal with MPAC and get us those floor plan reports for free, or a discounted rate.

        Most agents won’t pay the $5.00 cost, even for a listing. I routinely purhcase these when doing CMA’s for clients. I usually purchase 200-300 per year.

        1. Appraiser

          at 11:51 am

          @ David Fleming

          If it makes you feel any better, my current trainee and I are burning about 200 credits a month at $2 per (I buy in bulk – minimum 250). @Rem above is correct that FNF worked a deal with MPAC.

          I’m not sure about his proposition that anyone can sign up with made up info. – but I could be wrong. If so, it’s a good deal at $3 per.

  5. Max

    at 10:35 am

    I used to live on a street that was not busy, was a small residential street with one lane each way, but happened to be the favourite shortcut during rush hours, and a favourite parking spot for parents dropping off their kids at school. I would have to wait for at least 10 cars before I could leave my driveway at times (though not all the time).

  6. Numberco real estate owner

    at 11:16 am

    One other “issue” with living on a busy street may be dust. I lived in a property that backed onto a major artery, and I found dust in the house all the time.

    I agree with one of the posters above – when saying busy, is it a street like Islington or is it a street like Blythwood? I would definitely consider buying on a busy street as an investment (so that someone else lives in it) if I thought there is redevelopment potential.

    1. Bob

      at 1:40 am

      Is there some study done on this ? Like how the number of traffic impacts the price ?

  7. SW

    at 3:17 pm

    I think the problem can also be compounded by the massive price appreciation of the last 15 years. Let’s just say front a really busy street in Lawrence Park or Moore Park used to warrant a 30% discount. It was one thing when the discount was $800k vs. $1.2mm. It’s totally another when it’s $2.4mm vs. $3.5mm. When you’re spending $2.4mm, there’s a minimum you expect in terms of comfort/convenience/safety.

    Same goes with parking spots. At some point, if you’re spending $2mm, you expect at least one.

    1. Not Harold

      at 4:14 pm

      Moore is busy but doable. The houses that are beside Mt Pleasant or the ones on Lawrence would be killers.

      Noise, dust, and speed are what really does it.

      If you’re on the North side of Moore you get the cemetery in your back yard and the park across the street. Not bad as long as you have front pad parking or a garage in the backyard. But yeah that 2.4 for a damn narrow mutual drive with possibly only space for one car… yikes.

  8. Mike

    at 2:51 pm

    Our family bought a house on a busy street using the pavlov team. They were upfront and informed us the street we were going to live on was busy and I had not had previous realtors be so candid. We moved from a small city and didn’t know too much about the streets here. Ryan Young our real estate agent seemed to know every single street in Toronto.

    It doesnt bother our family, the noise. Our son has to fall asleep with traffic now, hah!

    This is the Realtor we used Ryan Young for anyone looking he was fantastic and not all about the money .

  9. Jennifer

    at 9:02 am

    Child safety, pollution, limited value appreciation… no thanks. If you can’t afford it, you can’t.

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